ECONOMIC COMMISSION

POLITICAL ECONOMY

Capitalism is based on production by wage labor. That means that all value is produced by the workers and other laboring classes working collectively. The product is the property of the capitalist owners, while the actual producers only receive wages that amount to the minimum they need to support themselves and their families so that they can return to work the next day. Moreover, as capitalism develops, these wages are continually forced down. Thus the fundamental contradiction of capitalism is between the social character of production (many workers working together to produce a product) and the private character of appropriation (the products produced are the property of a constantly shrinking number of capitalists). Under this system, the capitalists, the rich, get richer, while the workers, the poor, become poorer. Our chief economic aim is to remove the capitalists from ownership, as our chief political aim is to remove the capitalists from power. For over 150 years, this system has produced cyclical crises. This means that as production increases, the working people with their limited wages cannot afford to purchase the mass of goods produced. Production slows to a recession or depression, workers are thrown out of work, until the point is reached where production is able to slowly increase again. This was the case in the Great Depression of the 1930s and in the smaller recessions before and since. In more recent decades, the government and finance capital have turned toward a vast expansion of credit to artificially stimulate demand. But this has only led to increased overproduction crises when the credit bubble burst. This is what happened in the “sub-prime mortgage” crisis of 2007-2008. Many people who were granted credit to buy homes were unable to pay their mortgages. This led to the bankruptcy or near collapse of many major banks and other financial institutions. The government was only able to get out of this crisis by bailing out these institutions with trillions of dollars of taxpayer money. They thus put the burden of the crisis on the backs of working people. We must make the rich pay for the crisis that they created.